Afghanistan’s economy could shrink 30% this year: IMF

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Afghanistan’s economy could contract 30 per cent this year, the International Monetary Fund has said in a report. This could lead to a refugee crisis impacting its neighbouring countries.</p>
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According to a <a href="https://www.reuters.com/world/asia-pacific/afghanistans-economic-collapse-could-prompt-refugee-crisis-imf-2021-10-19/">Reuters</a> report, with non-humanitarian aid halted and foreign assets largely frozen after the Taliban seized power in August, Afghanistan’s aid-reliant economy currently faces multiple challenges.</p>
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For a country, where grants have financed around 75 per cent of the public spending, choking of aid would lead to crumbling of the economy. The US has frozen the $9.5 billion reserves that the country has in overseas accounts. Besides, flow of remittances has choked too.</p>
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The IMF also said that the uncertainty in Afghanistan would result in economic and security spillovers to the region and beyond.</p>
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"A large influx of refugees could put a burden on public resources in refugee-hosting countries, fuel labor market pressures, and lead to social tensions, underscoring the need for assistance from the international community," the IMF said in the report.</p>
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Just after the Taliban took over Kabul, Afghanistan’s former acting Central Bank governor Ajmal Ahmady said in a tweet, “Taliban won militarily – but now have to govern. It is not easy.”</p>
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However, unlike 2015 during the Syrian conflict, several countries in Europe and elsewhere this time showed their reluctance to provide asylum to refugees fleeing Afghanistan.   </p>